October 12, 2020
Real Estate

What You Need To Know About Buying a House in Vietnam

As a foreigner, you must do enough research before you buy a house or flat in Vietnam. There are rules and regulations that foreigners must follow before they can purchase any property in the country. The rules will vary greatly depending on certain factors.

Whether you plan on moving to Vietnam or you just want to invest in a property soon, here’s everything you need to know about buying a house or flat in Vietnam.

Are Foreigners Allowed To Buy Property in Vietnam?

There are some countries that prohibit foreigners from buying any kind of property and Vietnam is one of these countries. However, some foreigners were able to acquire real estate properties in the country but they have to abide by the strict ownership regulations imposed by the Vietnamese government.

In July 2015, the government introduced a new law regarding the purchase of residential properties. Thanks to this law, buying a property in Vietnam has been made easier for foreigners. Technically, foreigners can now purchase as many houses or flats as they want in Vietnam. The government has not imposed any restrictions on the number of properties they can own.

Before this law was introduced, there was a limit on the number of properties that a foreigner can own in Vietnam, which is up to a maximum of one condo unit only. But the law has made drastic changes to Vietnam’s foreign ownership regulations, allowing them to purchase as many properties as they can.

Vietnam’s New Law to Foreign Ownership of Properties

Here’s a summary of the 2015 law concerning foreign ownership of properties in Vietnam:

  • Foreigners are able to purchase property in Vietnam if they are legally allowed to enter the country.
  • There’s no limit on the number of properties that a foreigner can buy.
  • In a condominium building, foreigners are only allowed to purchase 30% of the total number of units. For properties with land, they cannot own more than 10% of the total projects.
  • Foreigners are able to purchase houses, however, there is a maximum limit of 250 houses that foreigners can buy in every ward.
  • The leasehold period will be 50 years but this is renewable.
  • Foreigners married to a Vietnamese local can acquire a freehold tenure.

Are Foreigners Allowed To Buy Properties Owned By Vietnamese Locals?

When buying properties in Vietnam, foreigners will most likely purchase directly from the primary market through a developer. Others will purchase a property previously owned by another foreigner.

But when it comes to buying properties from a Vietnamese local, the government has imposed certain restrictions. For instance, in a condominium building, the government has imposed a 30% quota on the number of flats that a foreigner can own. If the quota is filled, foreigners are not allowed to purchase a flat that’s owned by a local in the same building.

It’s also worth noting that foreigners are only allowed to purchase flats from a branded condominium and not from local flats unless they have a Vietnamese spouse.

Are Foreigners Allowed To Purchase Land Properties in Vietnam?

Foreigners are not allowed to acquire any land property in Vietnam. In fact, even Vietnamese citizens cannot own land. Technically, land properties in Vietnam are owned by the people but are regulated by the state. This is also the same for some other Southeast Asian countries. Malaysia is the only country in the region where foreigners can own land properties, but there are strict regulations when it comes to this.

As stated in Vietnam’s National Land Law, foreign organizations and individuals are allowed to lease land properties in Vietnam. The leasehold period will be up to fifty years, but it can also go to 70 years in some cases, although the government is planning to extend it up to 99 years.

Buying a House as a Foreign Resident of Vietnam

If you are a resident of Vietnam, you are allowed to purchase a house or flat. However, you cannot own the land from which the house is built. But you do have an option to lease the land from the state. Since the contract will only be a lease, you are allowed to sublet the house or flat. In other words, the contract will give you the right to own the property.

A foreign investor is allowed to invest in the real estate industry of Vietnam but he or she must have a joint venture with a local company or partner. As for foreign residents, they are able to own houses but they are not legally allowed to sublet the house. They can sell or donate the property if they choose to leave the country. If the foreigner will not dispose of the property after leaving Vietnam, the state will take ownership after 90 days and will immediately invalidate the house certificate.